Tags: Zuckerman | US | Work | Force

Zuckerman to WSJ: US Shifting Toward 'Part-Time, Low-Wage Work Force'

Tuesday, 06 Nov 2012 07:44 AM

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The U.S. economy is changing for the worse by becoming more reliant on part-time workers, said Mort Zuckerman, chairman and editor in chief of U.S. News & World Report.

The Bureau of Labor Statistics reported that the U.S. economy added 171,000 jobs in October, well above market forecasts for a gain of around 125,000.

In September, The U.S. economy added a net 114,000 jobs in September, though total employment rose by 873,000, largely due to a surge in part-time workers.

Alert: End of America's Middle Class a Startling Reality. Read More Here.

"For the first time, the U.S. economy has shifted in the direction of a part-time, low-wage work force," Zuckerman wrote in a Op-Ed appearing in The Wall Street Journal.

"The number of Americans now working part time has soared to 8.3 million — up 313,000 in the past two months alone."

The surge in demand for part-time workers reflects a lack of faith among businesses of all sizes.

"With economic growth declining or stagnant for quarter after quarter, many companies feel it is too risky to take on people full time."

The unemployment officially stood at 7.9 percent in October, much higher than pre-recession levels, but when factoring in part-time workers hoping for full-time work, the rate jumps to 14.6 percent.

Add to that, most new jobs involve low-wage positions and not the higher-paying value-added jobs the country needs to create.

In other words, the economy needs to add more finance, insurance and real-estate jobs and less food servers and waiters and waitresses.

"This underscores the difference between job quantity and job quality. When low-wage jobs are growing in number, mid-wage jobs are disappearing and higher-wage jobs are paying more, the result is a hollowed-out middle class," Zuckerman wrote.

"Looking ahead, the industries expected by the Bureau of Labor Statistics to add the most jobs by 2020 — healthcare, social assistance and retail — are notorious for low-wage and insecure work. Many don't offer even minimum wage or overtime protection."

Other experts point out that even though monthly jobs reports are improving, they are nowhere near the rate needed for sustained improvement.

"Unfortunately the economy has close to 8 percent unemployment and to bring that down to 6 percent over 3 years you would have to create about 350,000 jobs a month," Peter Morici, a professor at the Robert H. Smith School of Business at the University of Maryland, told Newsmax TV in an exclusive interview.

Revisions to previous jobs reports are also too miniscule to reflect sustained improvement in the labor market.

"No matter what number you take for the last several months — up, down, in between, first, third or seventh revisions — they all show too few jobs being created given the kind of fixe we are in and that the policies we are pursuing just don't work."

Alert: End of America's Middle Class a Startling Reality. Read More Here.

Other experts point out that presidential campaigns are hiring part-time workers to drum up support for President Barack Obama and his GOP challenger, Mitt Romney, which would account for the bump up in recent jobs reports.

"We have observed a large rise in part-time employment, which arguably hints of the sort of temporary, part-time hiring that is often associated with political campaigns," Joseph LaVorgna, an economist at Deutsche Bank, wrote in a note.

"In addition, we also observed a large +368k increase in employment of 20 to 24 year olds, arguably the demographic most likely to take part working on political campaigns. Indeed, we should note this was the second largest monthly increase in the history of this series."

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